Here Come The Penalties

For those of you who have still not sent in your 2010/11 tax returns to HMRC (apparently around 500,000 people have been "tardy/forgetful") you may soon expect to hear a light thud on your doormat as your penalty from HMRC arrives.

It seems that the penalties will be for a minimum of £1,200 per person (that makes around a minimum of £0.6M in penalties accruing to HMRC) being:

• the maximum £900 in daily penalties for non-filing
• a further late-filing penalty of £300 or 5% of the tax due (whichever is higher).

These penalties are of course in addition to the £100 late filing penalties for missing the 31 January deadline (which were issued in Q1 of this year).

However, be not alarmed, as HMRC’s Director General for Personal Tax, Stephen Banyard, said:

“We want the returns, not the penalties."

Here is the full text of the HMRC press release:

"Around half a million people who still haven’t sent their 2010/11 tax returns to HM Revenue & Customs (HMRC) will start to receive additional penalty letters from this week.

The number of outstanding returns has almost halved in 2012, down to 5.9 per cent, compared to 10.7 per cent in 2011. This means 518,000 fewer penalties are being issued. HMRC has also taken 273,000 people out of Self Assessment this year.

New penalties were introduced in April 2011 to boost the incentive to file and reduce the costs to taxpayers of chasing up missing forms. As a result, anyone who ignores their Self Assessment filing obligations is now liable to higher penalties than in previous years.

The penalties being issued from today will be for a minimum £1,200, comprising:

• the maximum £900 in daily penalties for non-filing
• a further late-filing penalty of £300 or 5 per cent of the tax due (whichever is higher).

People who receive a late-filing penalty can appeal against it if they think they have a reasonable excuse for not sending their tax return; for example, a family illness or bereavement.

Anyone who has received a late-filing penalty and has not sent in a return, but thinks they don’t need to be in Self Assessment, can still potentially apply to be taken out of Self Assessment. They can visit www.hmrc.gov.uk/latetaxreturn to check what to do if they think they don’t need to be in Self Assessment. If HMRC agrees, the return and any penalty will be cancelled.

HMRC’s Director General for Personal Tax, Stephen Banyard, said: “We want the returns, not the penalties. This year, half a million more people have filed their return – which means we are issuing 44 per cent fewer penalties.

“But, despite several reminders, nearly six per cent of people have not sent their 2010/11 tax returns to us and they’ll be getting a penalty.

“Where someone has a reasonable excuse for not sending a return on time, we will waive the penalty. We also recognise that there will be some people within this group who don’t need to be in Self Assessment, and we will be happy to remove them from the Self Assessment system and cancel their penalty.”

The penalties being issued over the next few weeks are in addition to £100 late-filing penalties for missing the 31 January filing deadline, which were sent out in late February and early March.

Notes for editors1. The new penalties for late Self Assessment returns are:

• an initial £100 fixed penalty, which now applies even if there is no tax to pay, or if the tax due is paid on time;
• after three months, additional penalties of £10 a day, up to a maximum of £900;
• after six months, a further penalty of 5 per cent of the tax due or £300, whichever is greater; and
• after 12 months, another per cent or £300 charge, whichever is greater.

2. There are also additional new penalties for paying late of 5 per cent of the tax unpaid at: 30 days; six months; and 12 months.

3. Further information on the new penalties is available from the HMRC website at http://www.hmrc.gov.uk/sa/deadlines-penalties.htm

4. Follow HMRC on Twitter at: @HMRCgovuk

5. Images are available on HMRC's flicker channel www.flickr.com/hmrcgovuk"

Tax does have to be taxing.



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To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

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RTI On Track - Gauke Nixes Centralised Deductions

Despite the fact that Stephen Barnyard (or is it Banyard?), the man with his hand on tiller of HMRC's flagship RTI, is soon to retire and that the All-Party Parliamentary Taxation Group (APPTG) has called into doubt the achieve-ability of the RTI October 2013 deadline in their report ‘PAYE at the Crossroads’ David Gauke (the Exchequer Secretary to the Treasury) says that everything is fine and on schedule.

For good measure he also rejected the APPTG recommendation for centralised deductions. APPTG were of the view that centralised deductions:

"would remove most of, if not all of, PAYE’s negative dimensions and revolutionise the way that citizens interact with the state."

Pay and Benefits reports that Gauke said:

“We are pursuing Real-Time Information (RTI). We are not pursuing Centralised Deductions.”

Regarding delaying RTI, he said:

“It is on track and going well.

We are optimistic it will deliver to the timetable.”

ROFLOL!

HMRC's RTI flagship sails majestically towards its destiny!

Tax does have to be taxing.



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TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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Bon Voyage Stephen Banyard

Q: Why is Stephen Barnyard (or is it Banyard?;)) so upbeat and effusive about RTI?

A: He is retiring soon!

As per PAYE At The Crossroads:

"Stephen Banyard will be shortly stepping down from his position and retiring. He leaves behind him a legacy of modernisation and the APPTG wish him well in his retirement. 

We hope his successor will be able to continue along the path that Stephen has laid out."

Aha!

He could of course come back as a paid consultant, if things don't run smoothly;)

Tax does have to be taxing.





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What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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Good News Everyone - RTI Is Brilliant!

Following yesterday's HMRC Tweetalong about RTI, I am sure that those who took part will be pleased to know that in the view of HMRC RTI is "going very well".

Hoozah!

This is the view of Stephen Barnyard (or is it Banyard?) Acting Director of Personal Tax set out in an HMRC press release entitled "RTI pilot goes from strength to strength" issued 9 July 2012.

Seemingly, by the end of September, there will be up to 1,300 employer schemes reporting PAYE in real time.

Loyal readers know that I (and indeed many loyal readers) have a somewhat cynical view about the likelihood of RTI working on budget, on time and without cocks ups:

"There are over 4 million employers in the UK. The RTI Pilot is running with just a handful. I gather even by October 2012 the number will have only been increased to a couple of thousand. This is still only about 0.05% of the total. The plans seem to suggest that over 99% of employers are going to be brought into the scheme from April-October 2013. This is a challenging timetable to put it mildly..."

Here is Barnyard's press release in full, as ever comments and views are always welcome:

"Over 1,300 employers will join the Real Time Information (RTI) pilot between now and September 2012 HMRC announced today.

Stephen Banyard, Acting Director General for Personal Tax, said:

“RTI is on track and the pilot is going very well. We started in April with just 10 employers and now we’ve successfully received over 1.7 million individual records from 338 PAYE schemes.

“Following the success of the first pilot stage, more PAYE schemes will join the RTI pilot, as planned, and by the end of September up to 1,300 employer schemes will be reporting PAYE in real time.

“We are also seeing external confidence in the pilot and we’ve responded to that by offering more large employers, payroll bureaux, new employers and software developers the opportunity to join the RTI pilot or to expand existing involvement in advance of the launch date in April 2013.”

Most employers will begin reporting PAYE in real time in April 2013. All employers will be routinely reporting PAYE in real time by October 2013, in time for the introduction of Universal Credit.

Notes to editors
1. RTI was launched in April 2012. It was expanded from 8th May as scheduled, when the first of a further 310 PAYE schemes started reporting PAYE information in real time. HMRC is on track for a further expansion in November.

2. The pilot includes a wide range of employers based on size, industry type, location, software use to ensure the pilot represents a wide employer base.

3. More information can be found here.

4. Two free webinars are also available:

• "Real Time Information – an overview” – a 15 minute look at the RTI timetable, main day-to-day changes employers will see, and help and support available.
• “Accurate Employee Information Matters – it can save time and money” - an 11 minute look at examples and the implications of inaccurate employee information, plus tips on how to avoid this and make sure that employee information is recorded accurately.

5. RTI will support the operation of Universal Credit – the Government’s flagship welfare programme - which brings together means-tested in and out-of-work benefits, Tax Credits and support for housing, and will improve work incentives and make work pay.


6. Follow HMRC on Twitter @HMRCgovuk"

Tax does have to be taxing.



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What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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RTI On Track?

HMRC recently announced the addition of a further 310 employer schemes to its Real Time Information (RTI) pilot, launched last month.

Allegedly, RTI will make it easier for employers, pension providers and HMRC to administer the pay-as-you-earn (PAYE) system. Under the new arrangements, employers and pension providers will tell HMRC about PAYE payments at the time they are made, as opposed to only at the end of the year as at present.

HMRC claims that it has so far successfully received over 100,000 employee records from 10 volunteer employers. The additional 310 employers are set to join the pilot between May 8 and the end of June.

Stephen Banyard, Acting Director General for Personal Tax at HMRC, is quoted by Tax-News:

“It’s early days, but all the signs are good. RTI is on track - all expected PAYE submissions have been received from the 10 pilot employers and processed. 

The whole point of the pilot is to identify any implementation issues. So far, these have been very few and they have been quickly resolved.

We are working closely with the employers in the pilot who have helped us identify and solve any issues. We have improved our guidance and support for employers and software vendors as a result of the insight and feedback gained. 

We are very grateful for the valuable contribution the pilot employers and software developers have made." 

That's great so far, apparently!

However, according to a comment on FreeAgent.com, HMRC appear to be a tad selective with whom to pilot RTI:

"I spoke to HMRC about testing RTI in pilot phase for biz with 0-9 employees. 

They were only interested in piloting with those who had substantial payroll & existing systems. 

Interesting, no?"

It looks like the interests and input of/from micro businesses are being ignored.

Comments and opinions are, as ever, very welcome.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Issues May Day Alert

HM Revenue & Customs (HMRC) is urging anyone who has still not done their 2010/11 tax return to send it online before the end of April, or be charged daily penalties from 1 May.

Anyone whose Self Assessment return is more than three months late will now be charged a further £10 penalty for each day it remains outstanding, up to a maximum of 90 days. This is on top of the £100 late-filing penalty they have already received.

This means people who file their 2010/11 return online on or after 1 May will be liable to daily penalties, as the deadline for these was 31 January. Daily penalties for paper returns began on 1 February, as paper returns were due by the earlier deadline of 31 October.

Looking ahead, further penalties of at least £300 (or 5 per cent of the tax due, if that is more) will be issued for returns that are 6 and 12 months late.

Anyone who’s received a late-filing penalty, hasn’t yet sent a return, but thinks they don’t need to be in Self Assessment, should call HMRC on 0845 900 0444. If HMRC agrees, the return and any penalty will be cancelled. Visit www.hmrc.gov.uk/latetaxreturn for further information.

HMRC’s Stephen Banyard said:

“We want the returns and not penalties. So, if you haven’t sent us your 2010/11 return, you need to do one of two things urgently – either send it online by 30 April, or call us if you think you shouldn’t have to complete one.”

Notes for editors
1. The new penalties for late Self Assessment returns are:

• an initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time;
• after 3 months, additional daily penalties of £10 per day, up to a maximum of £900;
• after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
• after 12 months, another 5% or £300 charge, whichever is greater.

2. There are also additional new penalties for paying late of 5% of the tax unpaid at: 30 days; 6 months; and 12 months.
3. Further information on the new penalties is available from the HMRC website at www.hmrc.gov.uk/sa/deadlines-penalties.htm

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Uses The C Word

26 January 2011

Self Assessment deadline

To make sure our customers are not disadvantaged if they cannot get through to HMRC's call centres on 31 January, we will not impose any late filing penalties for people who file their Self Assessment returns on 1 and 2 February.

The SA deadline remains midnight on 31 January. But HMRC will treat all returns that come in by midnight on 2 February as though they were submitted by 31 January. No customer will have to pay interest on payments due on 31 January that are paid on 1 or 2 February.

Acting Director General Personal Tax, Stephen Banyard, said:

"We've always been very clear that we want the returns - not the penalties. For that reason, we don't want anyone who can't get through for help and advice on 31 January to be disadvantaged in any way."

Tax does have to be taxing.

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Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"